MCLEAN, Va.—Capital One has been hit with a proposed class action in federal court in Virginia alleging it unlawfully wiped out billions of dollars in earned credit card rewards by shutting down customers’ accounts without cause and then refusing to let cardholders redeem points or cash back they had already accrued.
The new suit, reported Law360, contends the bank breached its cardholder agreements and engaged in unlawful business practices by canceling accounts that were not in default while continuing to market rewards as redeemable.
According to Law360 and a release from plaintiffs’ firm Scott+Scott, the complaint was filed in the U.S. District Court for the Eastern District of Virginia and argues the issue is large enough to involve “billions” in earned rewards. Scott+Scott said the lawsuit points to Capital One’s own disclosures showing cardholders had accumulated about $9 billion in rewards as of the end of 2024, and alleges some of those rewards were effectively confiscated when accounts were closed without any cardholder default.
The suit could draw attention across the card industry because rewards programs are a core part of how issuers compete for spending and loyalty, and any allegation that accrued rewards can be forfeited after a unilateral closure raises potential UDAAP-style and contract-risk questions.